Own Qantas (ASX:QAN) shares? Here’s what to look for during reporting season

It’s been a tough financial year for Qantas. Here’s what might come of it.

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Reporting season is almost here and investors will be keeping a close eye on news from Qantas Airways Limited (ASX: QAN), as well as its embattled share price.  

Right now, the Qantas share price is $4.62.

It’s been a tough 18 months for Qantas. Its soon-to-be-released annual report will describe a year in which it’s battled COVID-19 at every turn.

The Qantas share price started the 2021 financial year at $3.78 and finished it at $4.66. But the best testament to its performance will come in August.

Qantas plans to release its preliminary final results on 26 August. Here’s what you should look for.

What to look for in Qantas’ results

Traffic stats

On May 20, Qantas predicted it would see its domestic capacity sitting at 95% by the fourth quarter of the 2021 financial year.

Although, according to The ABC, last week Qantas told its staff that domestic services were at 90% capacity before Sydney went into lockdown. That figure had since dropped to 60%.

Over the 6 months ended 30 July 2021, parts of Western Australia, Victoria, the Northern Territory, and Queensland were all temporarily locked down for between 3 and 14 days at various times.   

Sydney’s current lockdown is by far the most extensive. However, it didn’t begin until 25 June and therefore may not severely impact Qantas’ results.

If losses have increased or decreased

Additionally, the Qantas share price could be impacted if the airline reports more losses.

Qantas has been among the hardest-hit shares throughout the COVID-19 pandemic.

In its half year results, the airline reported an underlying loss before tax of $1.03 billion and a $6.9 billion revenue impact.

However, its domestic services were reporting positive cash flows.

That may or may not be the case for the second half of the 2021 financial year as lockdowns and border restrictions were regularly in place throughout the period.

The airline released guidance in May, stating Qantas expects a post positive statutory free cash flow within its full year results. It is also expected to announce a statutory loss before tax of $2 billion.

However, the guidance assumed no further lockdowns or border restrictions would be instated.

Additionally, the Transport Workers’ Union claims the airline has received $2 billion in government support which, if true, could negate some losses.

Although, the airline denied receiving the funding, claiming the majority of the government support it received came from JobKeeper.

Debt levels

At the end of the financial year’s first half, Qantas had $6.05 billion worth of debt to its name.

The airline previously said its debt levels had peaked in February and would begin recovering in the fourth quarter.

Eyes will be peeled to see if Qantas’ debt forecast has come true. Particularly since rumours were swirling that Qantas is looking to sell land to repay debt only yesterday.

Qantas share price snapshot

2021 hasn’t been good for the Qantas share price.

It is currently 5.9% less than it was at the beginning of the year. However, it has gained 37.5% since this time last year.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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